Wajax Corporation · TSX:WJX
Wajax — Q3 2019 Earnings Presentation
21 slides from Wajax's earnings presentation, Nov 5, 2019
Slide 1: Wajax Financial Results Q3 2019
Wajax Financial Results Q3 2019 November 5, 2019
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding \\ Forward-Looking Information This presentation contains certain forward-looking statements and forward-looking information, as defined in applicable securities laws (collectively, “forward-looking statements”). These forward-looking statements relate to future events
Slide 3: Highlights – Strong Third Quarter
\\ Highlights – Strong Third Quarter • Lower revenue in western Canada, primarily due to -1% Revenue1 $365.1 lower mining and construction equipment sales million • Largely offset by strong gains in eastern Canada across most categories, led by ERS • EBIT increased $0.8 million, compared to the prio
Slide 4: Revenue by Region
\\ Revenue by Region Q3 20191,2 YTD 20191,2 • Revenue decreased $2.0 million, or 0.5%, to $365.1 • For the nine months ended September 30, 2019, million in Q3 2019 versus $367.1 million for the revenue increased 5.2%, or $57.3 million, to same period in 2018 $1,149.1 million versus $1,091.8 million
Slide 5: Revenue Analysis
\\ Revenue Analysis Q3 2019 YTD 2019 • $26.0 million (-19.2%) • $36.4 million (-9.0%) decrease Equipment Sales C decrease compared to Q3 C compared to 20181 19% 20% 20181 • Lower construction sales in E E 39% • Higher forestry sales in central 39% western and central Canada and $109.7 and eastern Ca
Slide 6: Revenue by Category
\\ Revenue by Category YTD* Category1 Q3 2019 Q3 2018 Change YTD 2019 YTD 2018 Change E W C Construction $ 53.0 $ 69.5 $ (16.4) $ 173.3 $ 204.3 $ (30.9) ↑ ↓ ↓ Material Handling 30.8 33.9 (3.1) 114.9 106.5 8.4 ↑ ↓ ↓ ERS 40.4 17.4 22.9 115.4 50.4 65.0 ↑ ↑ ↑ Industrial Parts 90.7 88.6 2.1 278.1 271.2 6
Slide 7: Adjusted Basic EPS
\\ Adjusted Basic EPS1 Q3 2019 YTD 2019 • Q3 adjusted net earnings of $10.3 million, or $0.52 • YTD 2019 adjusted net earnings of $31.7 million, or per share, representing a $0.8 million increase over $1.59 per share, representing a $0.3 million the prior year period1,2 increase over the prior year
Slide 8: Backlog
\\ Backlog1 1• Backlog decreased by $8.6 million (-3%) from Q2 2019 to $287.9 million • Equipment backlog decreased $3.1 million driven primarily by lower forestry, power generation and construction orders offset partially by higher mining orders 2• Backlog increased by $47.7 million (20%) compared
Slide 9: Inventory
\\ Inventory 1• Inventory (including consignment) decreased by $3.1 million from Q2 2019 to $575.4 million1 • Consignment inventory decreased $22.0 million and consists primarily of construction excavators 2• Inventory (including consignment) increased by $109.3 million compared to Q3 20181 • Net of
Slide 10: Robust Balance Sheet
\\ Robust Balance Sheet Credit Capacity Adjusted Return On Net Assets (RONA)1,2 15.0% 4.0x 13.7% Available Capacity 12.5% 3.0x 11.8% 11.8% 2.81x Q3 2019 10.0% Q3/18 Q2/19 Q3/19 Debt / EBITDA 2.0x Working Capital Efficiency1 Target Range 25% 3.0x 24.4% 23.3% 2.7x 2.5x 1.0x 23% 2.4x 21.3% 2.0x 2.0x 20
Slide 11: 2019 Outlook
\\ 2019 Outlook • Market conditions declined in the third quarter, most significantly in western Canada, resulting in a deterioration in revenue momentum as the quarter progressed • While recognizing the effect of possible weaker conditions, Wajax has not changed its operational plans and continues
Slide 12: Appendix
Appendix -\\ Together We Get More Done:
Slide 13: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Except where noted, all figures are in millions of Canadian dollars, except per share data and ratio calculations. This presentation contains certain non-GAAP and additional GAAP measures that do not have a standardized meaning prescribed by GAAP. Therefore,
Slide 14: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures EBITDA Net earnings (loss) before finance costs, income tax expense, depreciation and amortization. EBITDA is a non-GAAP measure commonly used as an indicator of a company’s cash operating performance. Adjusted net earnings Net earnings (loss) before after-t
Slide 15: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Net assets Net assets are defined as total current and non-current assets excluding cash, income taxes receivable, derivative instruments, deferred tax asset and lease assets, less total current and non-current liabilities excluding bank indebtedness, income
Slide 16: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to adjusted net earnings and adjusted basic and diluted earnings per share is as follows: Three months ended Nine months ended September 30 September 30 2018 2018 2019 2019 (As adjusted)(3) (As adjusted)(3) Ne
Slide 17: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to EBT, EBIT, EBITDA and Adjusted EBITDA is as follows: For the twelve months ended September 30 2019 Net earnings $ 33.4 Income tax expense 13.1 EBT 46.5 Finance costs 17.2 EBIT 63.6 Depreciation and amortiza
Slide 18: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Calculation of the Corporation’s funded net debt, debt and leverage ratio is as follows: September 30 2019 Bank indebtedness $ 0.4 Long-term debt 287.4 Funded net debt(1) $ 287.8 Letters of credit 5.4 Debt $ 293.3 Leverage ratio(2) 2.81 (1) Effective with th
Slide 19: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to EBT, EBIT and Adjusted EBIT and the calculation of the Corporation’s RONA is as follows: For the twelve For the twelve For the twelve months ended months ended months ended September 30 June 30 September 30
Slide 20: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures (5) For the twelve months ended September 30, 2019 and June 30, 2019 – Includes the $0.5 million Delom transaction costs recorded in the fourth quarter of 2018. (6) For the twelve months ended September 30, 2019 and June 30, 2019 – Includes the $0.4 million
Slide 21: wajax.com
b viata \\ Together We Get More Done. Wajax.com